Australia shows US how a real broadband strategy works

Australia's government is backing an ambitious plan to build a new fiber-to- …

Australia's government has launched an ambitious effort to build a new fiber-to-the-node national network that will provide at least 12Mbps connections to 98 percent of Australia's population. The two percent who won't have access will be covered under a program called the "Australian Broadband Guarantee" that provides funds to ISPs working in underserved areas. (Note to US regulators: this is what's known as a "national broadband strategy.")

The national government plans to spend up to AUS$4.7 billion on the project, which certainly isn't enough to fund the network. The money is intended more as an incentive; the network will be built and operated by a private company that will invest substantial capital of its own, but the government stake is intended to 1) make sure that a national fiber network gets built, 2) that it reaches almost everyone, and 3) that it functions in the public interest.

This could go wrong in plenty of ways, of course. The company that wins the bid will certainly lean on regulators to let it operate with few regulations and open access rules, something already visible in incumbent telco Telstra's submission to the government (PDF).

Telstra wants to build the network, but it also wants the government to ease up on the open access rules that could force the operator to separate its wholesale and retail businesses; there might not be enough return on investment, otherwise. The Competitive Carriers' Coalition, which represents the small ISPs which need wholesale access to the new network, calls Telstra's proposal "obscene" (PDF) when it will be funded in part with taxes.

In fact, says the group, the money doesn't really matter. What's important is the network rules, since it's unlikely that a second, competitive national broadband network will be built in the near future.

The CCA's vision of an open-access fiber network fits with the comments filed by both Google and the Government of Queensland. Google's interest in broadband has become apparent all over the world, as Google tells any regulators who will listen that it got its start on an open network (broadband also lets more people access Google's services, of course, and provides a larger ad audience).

The company wants to see open, nondiscriminatory, wholesale access to the fiber network, but it also has special interest in traffic management. Google points out (PDF) that Australians are already one of the most "managed" countries in the world, with average broadband caps of 14.75GB per month. In addition, providers routinely offer access to "unmetered" services that they own or that they have done a deal with. On the new fiber network, Google wants these sort of arrangements to end.

Queensland's vision of the future

The Government of Queensland agrees (PDF) with the need for open access, but it wants a further restriction: the network operator won't be able to offer retail service of its own. This should ensure it treats all ISPs equally, though potential network builders are sure to complain that this won't allow them to make enough cash. Furthermore, Queensland suggests that all new construction get fiber-to-the-home, not just to the node.

The government wants the network completed on an aggressive timetable over the next few years. Its willingness to provide cash, leadership, and a regulatory regime for the new fiber network could ensure good-quality connections for most Australians, though because of its geographical isolation, bandwidth costs might still remain among the most expensive in the world (Australia has only a few international cables that handle Internet traffic).

In countries that are committed to surging ahead with broadband, a rough consensus appears to be forming: fiber backbones, mandatory wholesale access, and government leadership. We've seen it in countries like Japan, Sweden, and Australia, among others, and many other countries still mandate line-sharing, like the UK and Canada.

The US now sticks out for ditching its line-sharing rules and for having no national broadband push or universal service regime for broadband. States like California, Kentucky, and North Carolina are hashing out their own solutions, and Congress is considering making broadband service eligible for money from the Universal Service Fund, but a national broadband strategy certainly wouldn't hurt. And, if we could really have "big broadband" (100Mbps) and significant new competition for $100 billion, it wouldn't even be that expensive.